1999 | Case No. E78
BestOffer.com primarily chronicles the protagonists’, Pratap Mukherjee and Jeff Reed, efforts to develop an idea into an internet company. Through a string of contacts the two approach a venture capitalist (Archer) that within hours of the first meeting gives the company the all important first offer of funding. Within a week, the team leverages this offer to get another offer from a better known VC and soon they have accepted the second offer and are running a company. The company grows through the summer and meets it’s board determined milestones in the end of August. The second round of fund raising begins, but this time things do not happen as quickly. By the end of October, the company still hasn’t raised the funds. This time Jeff and Pratap have very clear and selective goals of what they want in a VC partner plus they are asking for substantially more money, this time in the $8 to $10 million dollar range. Also during late October, two well established automotive websites, Autoweb and Autobytel, begin to offer used car auction on their sites that compete with BestOffer.com . These launches are accompanied by media coverage and sharp rises in the share prices of both the other companies. Jeff and Pratap are faced with the issue of how to address their constituents and what to communicate. Originally the company had planned to launch in February and finance the launch’s media and advertising campaign to support the launch with funds from the second round of financing, however now that they have accelerated the launch due to a desire to “just get it out there!” there is no money to support a full launch with advertising to attract buyers and sellers. As we leave the case, the company must decide how to handle the situation.
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